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Millions or Crores in P&L and Balance Sheet

You will most often hear about any MNC - "It is 7 billion US dollar company". Then you tend to make a comparison of turnover based on millions and billions rather than crores or lakhs. I was looking at financial statements of TCS, Satyam & Wipro - the top three Indian IT companies.
  • TCS financial statements is in Indian Rupees and reported the amounts in crores.
  • Wipro's financial statement is in Indian Rupees and reported in millions. The consolidated statements in US GAAP is Indian Rupees with translations in US Dollars. The press release statement reports in Indian rupees with translations in US Dollars
  • Satyam financial statements are in Indian rupees and reported in 'crores. The US Gaap statements are reported in USD and in millions.

You may read the statements from the reader's point of view:

Investor in India :

When a reader has to compare statements of TCS & Wipro, he has to convert either Satyam statement into millions or TCS into crores. Otherwise he cannot make a suitable conclusion. In India, it is a general practise that amounts are reported in lakhs/crores.

Foreign Investor:

In business world, since the US dollar is dominant, he may ask his accountant to translate the financial statements in USD. Secondly, if the financial statements are in crores, then then it has to be made in millions. Then he would be able to make out sense in financial statements.

I don't think there is any Accounting Standards in India on the amounts are to be reported in millions or lakhs or crores. But I am of the opinion that

  1. The financial statements in India should be prepared in millions. (I should do away with my habit of thinking in 'crores !!!)
  2. The companies with turnover of more than Rs 10,000 million should also prepare their Balance Sheet and P&L in USD as on currency translations on last date of balance sheet.

ICAI should issue Accounting Standard on pt. 1 with due consultation with the industry and other bodies. The objective of good reporting is also comparability of financial statements.

A couple of months back, I was talking to one of my friends in US and he said that TCS is much bigger than CSC. When I told him to translate the sales to USD, then compare and he was upto a surprise. TCS is $ 2.2 billion and CSC $ 14.1 billion.

And couple of years ago, we were dicussing that Tata Motors has taken over a company for Aus $ 10 million. He said it was a great achievement for TML. When you translate the amount in Indian Rupees it 25 crores. When TML invests 25 crores, it is peanuts to them !!!

One of key factors of financial statements is comparability. I think ICAI should come out with a standard of reporting the amounts just like we have a standard metric system.


Santosh Puthran


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It is true that harmonizing the presentation of financial statements and expressing the figures in the way the world wishes is one of endeavour accounting bodies should attempt these days.
At the same time it is also true that no measure is common and adequate for instant metric system itself is expressed in two ways, the miles and kilometres for instance.
I think computers should now enable interface between what is presented and what is acceptable presentation by a software coversion mechanism so the comfort level and cultural identity is not at threat.
santoshputhran said…
Hello RV,

The Accounting Standards setting bodies should take this into account. Now businesses in India is going global so the users of the financial statments are not only people in India but everyone across the globe.

The financial statments should be easily comparable. Leave the computer softwares aside... but on the face of it, it should be comparable. That is why the standards are for.

The metric system that we use in India is a French system and it was adopted in India just after independence. India had its own system of measure but it was necessary to standardise.

In Mumbai (Bombay), khokha is underworld slang for a crore and peti is slang for a lakh. But they are not used in reporting financial statements to comfort the local sentiments.

We have to move fast globally. Not only in financial statements.. but in every sphere of life.



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